‘Dutch House Prices Still 33 Percent Too High‘

AMSTERDAM, 22/05/13 - Dutch house prices are still 33 percent too high in relation to the incomes of the population, The Economist says.

The free fall in house prices in countries like the Netherlands and France will persist for a while, the magazine warns. The big exception in the eurozone is Germany, which had a less marked rally in house prices before the crisis, as a result of which the houses there are now relatively cheap.

The Economist compared house prices in two ways: Price in relation to rent, and price in relation to disposable income per person. If these factors are higher than the historical average, property is overvalued, and if they are lower than the historical average, property is undervalued.